MASTERSON HOAG & SMITH P.A.: Can Medicaid Require You to Pay Them Back From Your Personal Injury Settlement?

Let’s say you’re injured in a serious car accident. To treat your injuries, you require a couple surgeries and a course of physical therapy. The costs of the medical care and treatment are significant. By way of insurance, you have Medicaid. Meanwhile, you file a claim against the at-fault driver and make a monetary recovery. Does the government have the power to assert a lien against your recovery and demand that you pay back the medical costs to Medicaid?

That is precisely the question the U.S. Supreme Court answered in 2006 in the case of Arkansas Dept. of Health Services v. Ahlborn.

The decision? The U.S. Supreme Court ruled that the state cannot assert a lien against any portion of a personal injury recovery, other than the amount recovered for the related medical expenses paid by Medicaid. In essence, the decision prohibited the government from using legal means to leverage Medicaid recipients into having to surrender a portion of their monetary recovery in a personal injury claim, if there was no recovery for the related medical expenses.